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McCain Up Against Wall Street Turmoil

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The Associated Press

Published: September 20, 2008

GREEN BAY, Wis. - Wall Street turmoil left John McCain defending his support for privately investing Social Security money in the same markets that had tanked earlier in the week.

The Republican presidential nominee says all options must be considered to stave off insolvency for the government insurance and retirement program, and top McCain advisers say that includes so-called personal retirement accounts like those President Bush pushed in 2005 but later abandoned.

The aides tried to soothe voters concerned about the bankruptcies, takeovers and bailouts on Wall Street by declaring McCain favored only the option of such accounts, just for younger workers, and most likely in a conservative investment vehicle such as bonds.

Private accounts for Social Security are "always an easier sell when the markets are going up instead of going down," said David Wyss, chief economist at Standard & Poor's. "I don't think this is a good week to sell that one politically, but you're looking at the long term here. You're investing your retirement funds for 20 or 30 years down the road."

Democrat Barack Obama opposes the accounts and has warned they could be a precursor to eliminating the government entitlement program. Obama has begun airing an ad in Florida, Pennsylvania, Michigan and some selected other markets that brands McCain as an ally of President Bush in efforts to "privatize" Social Security.

Critics also note that one of McCain's top economic advisers is former Texas Sen. Phil Gramm, a free-marketeer who pushed the idea of a privatized retirement system as far back as 1988.

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